Asked by Sheri Walton on Jun 25, 2024
Verified
The time to expiration is a variable that determines the value of an option.
Time To Expiration
The duration remaining until the maturity or expiry date of a financial instrument or contract.
- Comprehend the variables affecting option pricing and their impacts.
- Analyze the impact of time to expiration on option value.
Verified Answer
KS
KASHISH SHARMAJun 30, 2024
Final Answer :
True
Explanation :
The time to expiration is a key factor in determining an option's value, as it affects the time available for the option to become profitable. Longer until expiration generally means higher value due to increased potential for the underlying asset to move in a favorable direction.
Learning Objectives
- Comprehend the variables affecting option pricing and their impacts.
- Analyze the impact of time to expiration on option value.